THE BODY representing chartered accountants in Ireland has been fined €110,000 for mishandling a complaint against “big four” firm KPMG.
The Irish Auditing Accounting Supervisory Authority has censured Chartered Accountants Ireland (CAI) for failing to comply with its own disciplinary procedures when dealing with a complaint regarding KPMG’s audit of NTR.
Independent TD Shane Ross wrote to the CAI in September 2005 complaining about KPMG’s failure to identify an error of nearly €2 million during its audit of NTR’s financial statements. The error related to an underpayment to the State in respect of toll revenue collected by NTR on the West-Link Toll bridge for 2002 and 2003.
The authority censured the CAI for breaching bylaws during its handling of the complaint and it annulled certain decisions made by the institute’s complaints committee. It also directed the CAI to begin a fresh investigation of the complaint within 14 days and imposed a fine of €110,000. CAI confirmed it had paid the fine, which is the largest ever imposed upon it by the authority.
“While the institute accepts the sanction . . . it is disappointed at the findings and reiterates that it sought to act in the spirit of the bylaws at all times,” the CAI said in a statement yesterday.
“Our procedures have been amended and strengthened since this inquiry began four years ago and the institute now operates under a new independent regulatory framework,” it added.
After Mr Ross made his initial complaint in 2005, the CAI determined that a prima facie case was not established and that KPMG’s error was of an isolated nature. Mr Ross then availed of his right to have the determination referred to an independent reviewer, who found the complaints committee was wrong in a certain respect.
Despite this, the committee did not change its decision. The reviewer reiterated his position and once again the committee confirmed its original decision.
The institute found the CAI had breached its own bylaws as a result of “negligence and inattention”. It was also concerned the institute communicated “inaccurate and misleading information” to Mr Ross on three occasions.
